Editor’s Note: One of my favorite things about The Oxford Club is that our strategists and researchers don’t just recycle the same old topics and talking points you see everywhere else.
They’re bold enough to go against the grain and think for themselves, and they aren’t afraid to be wrong every once in a while.
As Research Director Kristin Orman writes below, that’s an essential part of creating a real edge in investing.
For more insights from Kristin and Chief Investment Strategist Alexander Green, check out Wealthy Retirement’s sister e-letter, Liberty Through Wealth.
– James Ogletree, Senior Managing Editor
In the late 1990s, I got my start at a small research firm in Boca Raton, Florida.
The firm was Avalon Research Group. And the method we used there – without fully realizing it at the time – had a name: scuttlebutt research.
The term comes from legendary investor Philip Fisher. He coined it in the 1950s in his classic book, Common Stocks and Uncommon Profits.
Fisher’s idea was simple. If you want to truly understand a company, don’t stop at reports and filings. Talk to the people closest to the business. Customers. Suppliers. Competitors. Employees.
At Avalon, we weren’t thinking about Fisher. We were just trying to see the full picture – so we could tell the real story.
Where Main Street Met Wall Street
Avalon wasn’t your typical research shop.
It wasn’t based in New York. It didn’t follow the herd. And it didn’t build its reputation by echoing consensus opinions.
Avalon was a contrarian firm that issued both buy and short recommendations – primarily to hedge funds. These were sophisticated investors looking for an edge, not recycled information.
Instead of relying solely on spreadsheets and earnings calls, we combined Main Street intelligence with Wall Street analysis. That meant getting out from behind the desk. Asking better questions.
Digging deeper than most big bank analysts ever would.
The best ideas didn’t come from models alone. They came from information other people didn’t have.
Meeting Marc Lichtenfeld
It was at Avalon that I met Marc Lichtenfeld.
Today, Marc is the Chief Income Strategist at The Oxford Club. Back then, Avalon was his first job as a newly licensed analyst.
Neither of us had decades of experience. That wasn’t why we were hired. What we had was curiosity – and a willingness to do the work others avoided.
We spent hours digging into companies, trying to piece together what was really happening beneath the surface. And quickly, we realized something important: If you only rely on what a company tells you, you’re only getting part of the story.
So we went further. We called customers to gauge real demand. We spoke with suppliers to see if orders were actually growing. We looked at competitors to find out who was truly winning – and who was just telling a good story.
Sometimes the numbers looked ordinary but conversations with customers or suppliers revealed demand was quietly accelerating behind the scenes. That advantage came from seeing what others couldn’t.
The Microcap Case for Scuttlebutt
Scuttlebutt research matters everywhere. But it becomes especially powerful in the world of microcap stocks.
These companies exist in a part of the market most investors never seriously explore. Many have little or no analyst coverage. They’re too small for large institutions to own and too obscure for major Wall Street firms to bother with.
That’s very different from large-cap investing. With big companies, information is absorbed almost instantly. Thousands of analysts, portfolio managers, and algorithms are all studying the same names at the same time.
But with microcap stocks, information gaps are common. And information gaps create market inefficiencies.
That’s exactly where scuttlebutt research can create a real edge.
Sometimes a company’s story sounded exciting on paper – but channel checks told a very different story. Other times, a company looked unremarkable until real-world sources revealed something the market hadn’t yet priced in.
In microcaps, where perception can lag reality by months or even years, that kind of informational advantage can be enormously valuable. It helps identify companies quietly building momentum long before Wall Street catches on.
Putting a Name to a Practice
Years later, after leaving Avalon, I came across Philip Fisher’s work. That’s when I realized we had been practicing scuttlebutt research all along.
The lesson is simple. The best investment insights don’t come from spreadsheets alone. They come from understanding how a business actually operates in the real world.
Today, investors have more data than ever. Earnings are instant. News travels in seconds. Research is everywhere.
And yet, most investors are still working from the same information. They read the same reports. They follow the same headlines. Their conclusions end up looking the same, too.
That’s why real edges are rare. And it’s why the kind of research we practiced at Avalon – scuttlebutt research – still matters. Especially where information is limited.
A New Home for Scuttlebutt
When I think back to those early days in Boca Raton, I realize how much that experience shaped the way I approach investing.
It wasn’t just about finding opportunities. It was about finding the truth before everyone else does.
Avalon was built on that principle. As it turns out, so is The Oxford Club – which is a big reason I came to work again with Marc and Chief Investment Strategist Alexander Green more than a decade ago.
Most investors assume the biggest opportunities come from the biggest companies. But history shows that’s rarely where the largest gains begin.
The companies that eventually become household names often spend years flying under Wall Street’s radar. Before the iPhone changed the world, Apple was still considered a niche computer company. Before Nvidia became synonymous with AI, it was primarily known for gaming chips.
The biggest winners often look unremarkable – until they don’t.
That’s why scuttlebutt research matters.
If history has taught us anything, it’s this: The biggest market opportunities rarely look obvious in the beginning.
When information is limited, the investors willing to dig deeper gain an enormous advantage.
